Foot and Mouth (Rural Economy)

3.30 pm

The Minister for the Environment (Mr. Michael Meacher):
I wish to report on the work of the rural taskforce, which held its second meeting this morning. We all agreed that our first priority remains to eradicate foot and mouth disease as soon as possible. The situation remains an extremely serious one. Its effects are very serious for farmers and the wider rural community, especially in tourism. The rural taskforce, which has representatives from a range of rural interests and Departments, is working urgently to develop measures to alleviate those impacts.

I must commend the response of the public who have been very anxious to avoid spreading the disease. However, large parts of the country are not affected, and people wrongly believe that the whole countryside is out of bounds. That has had a devastating and unnecessary impact on many of the businesses that depend on visitors to rural areas. The best way of helping rural businesses is to encourage their customers to return as quickly as possible to the many places where it is safe to do so.

The taskforce has therefore agreed on a number of actions to achieve that. First, last Friday we issued new guidance to the public on what they can do safely in the countryside and what they must not do. The basic message is that the public should stay away from livestock and their pastures, but that there are still plenty of things to do and places to visit in the country without risking spreading the disease.

Secondly, an increasing number of rural properties will be opening to the public again very shortly: English Heritage is announcing today that more than 200 properties will be open from 1 April; the National Trust will announce shortly that it will be opening about 150 properties between now and 1 April; and British Waterways will be reopening many of its canals starting next week. In all cases, that follows a very careful, in-depth review agreed with the Ministry of Agriculture, Fisheries and Food.

Thirdly, local authorities and national park authorities will be considering where footpaths can be safely opened. I hope that there will shortly be a much wider availability of footpaths for the public outside the infected areas.

Fourthly, we are mounting a public information campaign to ensure that the message gets through to the public about what they can and cannot do, and about the benefits that they can bring to rural businesses by their visits to the countryside--particularly to rural and seaside towns and villages, hotels, guest houses and tourist attractions in rural areas.

The Government, in conjunction with the tourism industry, are setting up a public information telephone line which will steer callers to more detailed help on what attractions are open. Extra funding will be made available to tourist boards to promote rural attractions.

We are also developing a preliminary package of measures to alleviate the immediate financial hardship of small businesses in rural areas which have been badly hit by the sudden decrease in visitors and other knock-on effects of the foot and mouth outbreak. In preparing the package, we have met and listened to a wide range of rural interests.

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The first stage measures are as follows. First, we can offer help through the rates system. We will consider help through the rates system by increasing the central Government contribution to rate relief, from 75 to 95 per cent., for small businesses in rural authorities in the areas of greatest need and that are suffering genuine hardship because of foot and mouth. Affected businesses can also apply to the Valuation Office Agency for a temporary reduction in their rateable value.

On Friday, we presented a Bill that will extend mandatory 50 per cent. rate relief to all food shops in small rural settlements. We will also lay regulations to extend mandatory 50 per cent. rate relief to sole village pubs and garages with a rateable value of less than £9,000. Local authorities will also consider using their existing powers to allow deferred payment of rates. We are also announcing a three-month extension to the deadline for business rate appeals.

Secondly, we can help through the tax system. As a first step, Ministers have asked Inland Revenue and Customs officials to take a very sympathetic approach to businesses experiencing financial problems as a result of the outbreak. The revenue departments already have power in specific circumstances to defer payment of taxes and national insurance contributions and to agree extended arrangements for time to pay. They will make maximum use of this flexibility for agricultural, transport, tourism and related retail businesses in the countryside, which cannot pay debts because of cash flow problems, where cash flow assistance, through rescheduling tax or national insurance contribution liabilities, would help.

Thirdly, we are considering with the Small Business Service and the banks how we can ensure continuing credit for small businesses badly affected by the impact of foot and mouth disease, including the use of the small firms loan guarantee fund. The Small Business Service, through a national helpline, will provide more information on the package of support available and access to the network of local business links.

Fourthly, we can help through the benefits system. Jobseeker's allowance may be available to employees and self-employed people out of work as a result of foot and mouth. The Department of Social Security will be making its procedures as fast and as flexible as possible.

I have had constructive discussions with the major banks. It is clear that they fully understand the problems faced by businesses from all sectors affected and they are being proactive in contacting their customers who are likely to be in trouble. They have made it clear that they are keen to support their customers wherever possible. They will look, on a case-by-case basis, at mechanisms such as extended lines of credit, capital repayment holidays and other measures. I would encourage all bank customers in difficulty or expecting problems to contact their local bank manager as soon as possible to discuss what options may be available.

Finally, I would like to pay tribute to the important role that the voluntary sector is playing in relieving rural distress. I can announce today that the Government will match the public donations that have been made to them for this purpose.

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I should stress that this is a preliminary package. The taskforce will continue in being as long as it is needed. I look forward to making further announcements in due course.

Mr. Archie Norman (Tunbridge Wells):
I thank the Minister of State for his statement. Many people in the countryside will have been awaiting his response today with mounting anxiety. It was a week ago that we first called for action to help businesses more broadly affected than those in the agriculture sector, including a call for business rate cancellation, on which the Minister commented today. It is now four weeks since the crisis started and it is clear that, on all sides, the extent of the crisis has been widely underestimated. The countryside is now risking meltdown and permanent loss of businesses, enterprise and employment. [Interruption.] Labour Members may not know about that, but Conservative Members do; we have many examples of enterprises that are threatened with going out of business imminently. The loss of employment will create enduring suffering in the countryside. It is important that all parties in the House address the question with great seriousness, and in a spirit of bipartisanship.

Against that background, the measures announced today will be widely welcomed, as far as they go. I have only just heard the Minister's statement, and the detail needs to be studied, but I have no doubt that the measures will command our support if they are delivered rapidly, and without bureaucracy and delay. However, businesses in the countryside need help now, not in a few months. The Minister was right to say that cash flow is their problem, and speed is of the essence.

Many people will be concerned that many of the proposals outlined by the Minister are conditional in nature and subject to further consultation. They will look for an accelerated time scale for the measures' implementation. It is hard to avoid the impression that the Government are still in the process of catching up with the crisis. We appreciate that the situation is fast moving, but the matter is now of the utmost urgency. When will the cash relief affect the bank accounts and overdrafts of affected businesses? That is the acid test.

In that context, I have a number of questions for the Minister. Will he undertake to look at the bureaucracy and the processes through which businesses must go, for example in applying for temporary rate relief? That process normally takes some weeks. Unless action is taken, however, businesses could go bankrupt in that period of time, especially given that Easter is approaching,

Does the Minister believe that the total tax relief, which he has presumably agreed with the Treasury, goes far enough? Will he give the House an idea of the Treasury estimate of the cost and financial commitment of the total package? That would give hon. Members an opportunity to judge the extent to which his announcement represents a real change.

For many businesses, the loss of cash flow will be irrecoverable. Overdrafts are rising, and tax deferral will merely add to the rising debt. Will the Minister consider going further than deferrals, and perhaps announce his support for enabling local authorities to provide a business rate holiday for the duration of the crisis for those businesses directly affected by it? The livelihoods of the

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owners of those businesses are at risk. The Opposition have advocated that proposal, and the Minister's statement was not clear on that point.

Again in a spirit of bipartisanship, may I raise the question of the climate change levy? I appreciate that that has been a matter of contention in the House, but I wish to set that to one side. I recognise that the levy has been approved by the House, but does the Minister consider it possible to contemplate a deferral of its implementation? The cost of the climate change levy to agriculture alone is estimated at £17 million. The Cumbria tourist board and others have called for a deferral. The levy is due to be implemented on 1 April, and will adversely affect many of the businesses that are already suffering.

The Minister will know that there remains widespread confusion about public events. Horse racing events in agricultural areas such as Lingfield are continuing, but other events, such as Crufts, have been cancelled. Hon. Members of all parties will have received letters from people who have been given apparently contradictory advice by local authorities and other bodies. My hon. Friend the Member for Ryedale (Mr. Greenway) gave me the example of the Sutherland Lodge activities centre in his constituency. The local authority has advised that all school outings should be cancelled, and as a result the future of the business is at risk.

Is it possible to provide further clarity in Government guidance about the holding of public events? That would enable people in this country--and foreign tourists thinking of visiting from abroad--to be clear about which public events are likely to proceed, and which are likely to be cancelled.

On the vexed question of the pending county council elections, the Minister will be aware that all the political parties involved in Cumbria and Devon have called for a postponement of them in those areas specifically. Many people in the areas worst affected are living under a state of siege. They would find it insulting if politicians were seen to be engaging in a partisan battle during the local elections. It is time, surely, for all parties to pull together in those areas. Have the Government considered our suggestions for deferring local elections, or for taking the powers to defer local elections in those areas, if necessary, so that a decision can be made in the next few days, depending on the way the crisis develops?

I appreciate that the role of the Environment Agency, for which the Secretary of State is responsible, falls at the outer edge of the subject covered in this statement, but the issue is critical to the industry. There is widespread frustration at the reluctance to authorise the burial of carcases. A report in 1969 recommended burials as the fastest and most effective method of disposal, and preferable to burning. Yet reports from all parts of the country suggest that the Environment Agency has adopted a negative and unconstructive attitude towards burial. We appreciate that the agency is now affected by European legislation, but will the Secretary of State undertake to meet the Environment Agency to discuss this and see what can be done to accelerate the process of burial where it is appropriate and where it can be undertaken without adverse environmental effects?

Finally, will the Secretary of State accept that it is critical to have greater clarity from the Government on the extent and severity of the crisis? It is vital that the extent of the problem is not understated. Some in the

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Government have given the impression of wanting to downplay the crisis, while others have emphasised its seriousness. With hindsight, it may have been unwise for Ministers to have briefed last week that the situation was "under control". The Secretary of State spoke of safe zones on the "Today" programme last Wednesday. I do not know what has happened to the concept of safe zones, but the Secretary of State for Culture, Media and Sport did not seem to have heard of them that same afternoon. That may be just one example of what has hitherto been a somewhat confused approach.

We appreciate that the situation is fast moving, and we welcome the Government's more encouraging response today. We will support remedies that bring fast relief to business. However, let there be no doubt that this is a national crisis that requires a national emergency response and a nation that speaks with one voice.